Future of the Euro 1: Waving goodbye to the Titanic

John Bufton says it’s high time there was a referendum on Europe

In 1973 when Britain joined the European Economic Community the slogan was “common market or bust”. How ironic that sounds today. The crisis rocking the Eurozone is now so severe that the IMF has publicly stated that only an internationally coordinated bail out could prevent the globe being rocked by depression.

In or out of the Eurozone?

Tomorrow Welsh Labour’s MEP Derek Vaughan calls for a cross-party alliance to make the EU case. On Wednesday we hear from Plaid’s MEP Jill Evans, and on Thursday Conservative MEP Kay Swinburne.

It is beyond embarrassment for the member states of the Euro area which regard the single currency as a cornerstone of their project. It has now reached a level where not only other member states may be sucked into the quagmire of fiscal misery, but the entire interconnected Gordian knot of global financiers.

It is unsurprising that the media is choked with opinion on David Cameron’s decision to veto the EU tax and budget pact. Its architects claim it is the only way forward in rescuing the Euro and guaranteeing the stability of every member state.

But what is essential to remember is that the proposals put on the table during that summit would do little to actually solve the crisis. The burning question of where the Eurozone would find at least a trillion Euros to prevent the currency union disappearing down a financial sink hole still remains unanswered.

We’ve had criticisms that Britain is now isolated and without power. Responses across the continent have done little to disguise the bitterness and vitriol many member states feel towards what they perceive as reckless, self serving betrayal. We have deeply frustrated France and Germany by blocking the legally viable option of unanimity to allow the changes to be enforced. A move by Brussels to sabotage our veto would involve changing laws in order not to break them and as such would be incredibly dangerous.

There have been rancorous demands for retribution, from stripping our rebate (which would leave the UK as the single highest contributor to Europe) to sabotaging any free trade agreement Britain may attempt to forge were she to exit the Union. Yet much less than losing influence, in many respects we hold it. Any attempt by Brussels to scrap the rebate would spark fury in the UK, potentially triggering our withdrawal, and threats made in anger to embargo trade would equally hurt the remaining member states and would do little to help the EU’s reputation on the international stage.

Even though it may have ruffled feathers in Europe, we are legally entitled to protect national interests and must be allowed to do so. To undermine our say would call the entire democracy of the EU into question.

Under this latest pact EU financial supervisors could govern the City in London. It is a coveted prize, to seize control of the place where 75 per cent of Europe’s private investment is dealt, potentially imposing taxes to siphon off much needed capital. But technocratic control would see banks quit London for Zurich, the effects of which would have a devastating impact on us. London’s financial services industry accounted for a £35 billion trade surplus in 2010, and contributed £54 billion in taxes as well as representing 2 million jobs.

The most repeated criticism is that the UK has lost its seat at the negotiating table, and thus decisions that affect us will no longer being taken in consultation with us. Some commentators suggest the Eurozone can enforce the policies anyway, rendering the veto entirely in vain. Yet the European Court of Justice states that changes to EU institutions must be subject to assent by all member states influenced.

A general consensus is that Britain wants one foot in the EU and one foot out. However we are not alone. There has always been a two-speed Europe, simply by the fact that 17 member states are in the common currency and 10 are not.

In Finland, Sweden, Hungary and the Czech Republic there is also widespread resentment of the demand that tax and budgets are controlled by Brussels, and quiet support of the UK stance. Even the French newspaper Le Monde confessed that the “Brits are not part of this euro crisis. And they have no responsibility for the failure of its institutions to resolve it.” Perhaps if we are isolated, it is for the best. After all, it is better to be on the docks waving goodbye to the Titanic.

German MEP Alexander Graf Lambsdorff suggests the EU “refounds itself without Great Britain”, suggesting “Switzerland is a model towards which Britain can turn”. Thereby it could trade freely with the bloc and cooperate bilaterally on important issues without being a member state subject to European law. As a result of autonomous cooperation, Switzerland is able to trade in a much freer environment. She has the highest wealth per adult in the world, was voted last year as being the most competitive country on the planet, and was listed as having the second highest quality of life globally.

Whatever comes to pass, the next few months are critical. Even without the UK veto, this pact could never solve the crisis. Whilst it may signify a willingness to prevent it happening again, it is rather like closing the stable door after the horse has bolted.

There will likely be more summits acting as stepping stones to complete political federation allowing all debt to be subsumed within one massive economy. In essence, this would be amalgamating the Eurozone into a single country rather like the USA. There is growing consensus that this is the only solution if the single currency is to be saved. However, such a bold decision will likely be made in increments to prevent public backlash.

UKIP MEPs have been arguing for years that a single currency without full fiscal union simply cannot work. We have been labelled doom mongers, political Luddites and even extremists for holding the view that, as it is today, the EU is much more than a common market of ten European countries. Instead, it is too powerful, too reckless and incongruous with both public opinion and political sense.nIt is high time people felt free to come out of the shadows and speak out against Europe. It’s high time we had a Referendum.

John Bufton is a UKIP MEP for Wales

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